Posts Tagged ‘housing’

Musings on affordability

Thursday, January 15th, 2009

We often hear the “30% of income” statistic used to define housing affordability. This is clearly inadequate. No one statistic will recognize our wide variables in lifestyle and situation. A suitable housing cost can be very different, for example, if a person doesn’t have a car, has a big family, doesn’t have a family, eats for free at a restaurant job, spends half their income on medical bills, etc.

If your expenses are mostly housing and food, paying 30% for housing seems downright quaint, however admirable and however great for retirement savings.

If a single metric is useful, how about 50% for housing plus transportation? It’s not perfect, but it’s much closer to the truth for pretty much everyone.

Local governments can do great things to encourage affordability. Some are happening now, and some aren’t.

First, take this...
Helping people live well without cars is a big start. It’s already easy for some people, but not enough. This means more housing near jobs and near transit, as well as better transit. It means corner stores, supermarkets, and other conveniences. Car sharing, taxis, and bike routes all help. We don’t have enough taxis because we don’t have enough customers, partially because we don’t have enough taxis. Again I’ll recommend a Seattle-only measure to increase bus service, since many neighborhoods are barely touched by Metro’s and Sound Transit’s planned improvements, and never will be with the 80/20 requirement.

Housing construction is expensive, and some of it is our own fault. Buildable sites are expensive because not enough land is zoned higher than what’s already there. Seattle’s famous “process” adds significant cost and risk for every project. We’re tacking on massive new fees onto projects above the older zoned heights. We’re disincentivizing new construction even though new supply is our greatest weapon to avoid SF/NY prices.

More on that: I don’t mean the new supply is affordable, because construction is expensive. But new supply means less demand for the old supply. That allows the old supply to gradually become cheaper over the years. That’s why the middle-class housing of 1920 or 1970 is generally more affordable today. (And the opposite is why similar housing in San Francisco or Manhattan is still outrageously expensive.)

Major kudos to the City for reducing parking requirements. This is already paying off as developers are developing parking in line with demand, rather than the average nimby’s idea of demand. The savings are dramatic for every space not built, and some projects that didn’t pencil with 25 spaces now pencil with 20 (with garage geometries, even one added space will sometimes trigger new costs in the hundreds of thousands).

In the third-rail department, our own expectations are part of the problem. In the US we tend to think 2,000 square feet is necessary for a family, and 800 square feet is barely livable for an individual. Basically we think we’re entitled to what much of the world would consider out-of-reach luxury. Why can’t a couple with two kids live in a two-bedroom apartment on a quiet street a few blocks from a park, at least until their careers advance a little?

Incentive zoning draws a crowd and strange bedfellows

Tuesday, October 7th, 2008

Incentive zoning to create affordable housing had a lengthy public hearing tonight.

Labor likes incentive zoning saying that “development left unchecked [will] widen the gap between rich and poor.” That doesn’t sound very “pro-development.”

But Steve Williamson from UFCW Local 21 said “We are pro development.” But Williamson added that we “want shared prosperity” which means requiring housing for people making 40% AMI requiring union labor for construction.

Labor supports incentive zoning as 'Development with Justice'

Labor supports incentive zoning as 'Development with Justice'

Low income housing advocates are in favor of this as well seeing an opportunity for new housing units and new dollars from a pay in lieu element in the legislation.

But there are two unlikely groups aligned against incentive zoning.

The first is John Fox’s Displacement Coalition. Fox in a recent e-mail about incentive zoning he said that “for months, our Mayor and most of our City Council have been hashing over new programs designed to reward developers with tax breaks, more density, and other giveaways.” In the same e-mail Fox calls for a moratorium on growth.

The second vocal group tonight was the business community and developers. Steve Leahy of the Greater Seattle Chamber of Commerce said that the proposal is actually a disincentive for new development. Up zones are incentive enough and the best way to create more affordable housing. They don’t see a giveaway here.

What do single family neighborhoods think of incentive zoning? On October 21st the City Neighborhood Council will be holding a meeting to discuss what incentive zoning might mean for single family neighborhoods.

Will single family neighborhoods join developers and the Displacement Coalition against incentive zoning? Do neighborhoods see incentive zoning as more density at their expense? Does the recent financial crisis make incentive zoning moot since credit has frozen and nobody can build or buy?